Kiev ready to discuss its $3 bln debt to Russia in early October — ministry

Sept 21 2016

TASS

Such talks may take place during the upcoming meetings with the International Monetary Fund (IMF).

Ukraine is ready to discuss the issue of its debt to Russia worth $3 bln through the pre-trial process, particularly during the upcoming meetings with the International Monetary Fund (IMF) in early October, a representative of the country’s Finance Ministry told TASS, adding that this is the position of the Finance Minister Alexander Danilyuk.

"In compliance with Ukraine’s obligations on the terms of the effective IMF program, particularly regarding fair talks with the Russian Federation on the stated debt, Ukraine is ready to enter further talks on potential resolution of the dispute. Any such negotiation that may take place at the appropriate time, for example, during the upcoming meetings with the IMF on the week starting October 3, 2016, in no case harms the position of Ukraine in this court procedure," he said, adding that "the British court system encourages the sides to resolve issues out of court."

Despite the announced readiness to pre-trial talks with Russia, Kiev continues preparations to the trial. "Ukraine is confident of its legal reasoning and is focused on preparations to the hearing planned for January 2017," the source in the Ministry said. Also, he added, Ukraine "is consistently sticking" to the position "clearly set out in Ukraine’s defensive pleading filed on May 27, 2016 within the proceedings currently continuing in the English court.

Earlier Russia’s Finance Minister Anton Siluanov said Russia was ready to continue talks with Ukraine on pre-trial settlement of the debt issue in case the Ukrainian side changed it position. He also stressed that Russia is ready to consider the issue on pre-trial settlement provided that Kiev’s proposals differ from the offers that commercial creditors were ready to accept.

In December 2013, Russian President Vladimir Putin and the then President of Ukraine Viktor Yanukovich agreed on a $15 bln loan to be extended to Kiev through placing Ukrainian securities. Under the deal, three-billion-U.S. dollar worth of bonds were listed on the Irish Stock Exchange on December 20, 2013 and acquired by Russia using the funds from its National Welfare Fund.

On December 18, 2015 Ukraine’s government imposed a moratorium on debt payment to the Russian Federation because of Russia’s refusal to sign a restructuring agreement on an equal basis with private creditors as Prime Minister Yatsenyuk said. Meanwhile, on December 17, the board of directors of the International Monetary Fund (IMF) recognized the official status of Russia’s loan to Ukraine as sovereign.

On December 20, 2015 Ukraine failed to make a payment on its debt to Russia. The Russian Finance Ministry filed a lawsuit against Ukraine to London’s High Court of Justice in February 2016. London’s High Court of Justice set the date of hearing of the case on Russia’s $3 bln debt claim against Ukraine on January 17, 2017.